Quotes

1
Quotes

• Dr. Gregory M. Shreve / Amanda Ennis
• Kent State University
• Institute for Applied Linguistics

2
Cost Estimation 101 (1)

• How do LI players (freelancers, agencies, etc.)
  decide what they charge their customers?
• Price total costs for providing service
  desired profit margin

3
Breakdown of Total Cost

• Total Cost

Cost of goods sold (variable resource costs and
materials costs)
Operating expenses (mainly fixed overhead costs)
4
Breakdown of Total Cost (2)

• Cost of goods sold (COGS)
• Refers to all costs associated with completing a
  given translation project human resources and
  materials

• Operating expenses
• Refers to all costs not directly associated with
  the completion of a particular translation
  project (overhead) rent, electricity, sales and
  administrative costs, etc.

5
Breakdown of Total Cost (3)

• Cost of goods sold human resources
• What can we refer to for information on the human
  resources we need for a particular job?
• Cost of goods sold materials
• What material costs might be associated with a
  given job?

6
Cost of Goods Sold for French Memo Job

• Human resources
• 1 French-to-English commercial translator
• 1 French-to-English commercial editor
• 1 project manager
• Materials
• No unusual type or quantity of materials

7
Breakdown of Total Cost (4)

• Operating expenses (overhead)
• This is a complicated calculation to make. For
  quotation purposes, we can consider operating
  expenses to constitute a flat percentage of the
  cost of goods sold (COGS). Of course, in real
  life, operating costs vary enormously depending
  on the number of employees, cost of office space,
  etc. (Well use 30 as our number for a
  small-to-medium translation agency.)

8
Cost Estimation 101 (2)

• Price total costs for providing service
  desired profit margin
• What kind of desired profit margin is realistic?
• Supermarkets lt1
• Banks 20
• Some computer companies gt50

9
Cost Estimation 101 (3)

• But what about translation companies? No one can
  really say for sure
• Relatively small number of practitioners
  compared to other industries, secrecy of
  individual owners
• No trade group or lobby compiles this info
• No public release of info as would be necessary
  for a publicly-traded company
• For our purposes, lets say wed like a
  before-tax profit of 35 after COGS and operating
  costs have been deducted from our income.

10
Cost Estimation 101 (4)

• Example
• COGS 10,000 Foozbas
• Operating Costs 3,000 Foozbas
• Desired Profit 7,000 Foozbas
• OUR PRICE 20,000 Foozbas

11
Cost Estimation 101 (5)

• A quick and dirty way to come up with an
  acceptable price figure is to double the COGS
  figure
• 10,000 x 2 20,000 Foozbas
• You can add a little more for complex
  multi-language jobs where your administrative
  burdens will be greater.

12
Establishing Resource Costs (1)

• Translators in different countries charge using
  different units
• Translators working in Germany charge by the
  line. A line of text consists of a certain number
  of characters (anywhere from 50 to 55, depending
  on who you ask).
• US translators charge by the word. Most charge
  by the target word, but some will accept payment
  by the source word.

13
Establishing Resource Costs (2)

• About 10 years ago, an antitrust suit alleging
  price-fixing was brought against the ATA, and as
  a result, we are no longer permitted to discuss
  real-world prices. For the moment, well use the
  following per-word prices for experienced,
  reputable freelance translators
• French, German, Spanish, or Italian into
  English
• 25 Foozbas per word of target (English) text
• 29 Foozbas per word of source (FL) text
• English into French, German, Spanish, or
  Italian
• 29 Foozbas per word of target (FL) text
• 32 Foozbas per word of source (English) text

14
Establishing Resource Costs (3)

• Costs for other services
• (Note 1 Centifoozba 100 Foozbas)
• Editing 60 Centifoozbas per hour or 8 Foozbas
  per TL word
• Proofreading 60 Centifoozbas per hour or 5
  Foozbas per TL word
• Project management, DTP, and front-end and
  back-end terminology management 65 Centifoozbas
  per hour

15
Establishing Resource Costs (4)

• We pay more to send our packages overnight, and
  the same applies to rush translations. If a
  client is asking for a deadline that works out to
  more than 3,000 words of translated and edited
  copy per day, youre definitely heading into rush
  territory. Surcharges range from 15-50, with
  20-25 being average.

16
A Word About Words

• When you are drafting your quotation, and later
  on, when you are hiring translators and editors,
  should you use the source word count or the
  target word count as the basis for your
  accounting?
• ?

17
Source-Word Accounting

• Advantages
• All costs are known up frontno surprise factor
• You can complete your administrative work
  sooneryoull know what your translators will be
  invoicing the moment they take the job

• Disadvantages
• If you receive a paper copy of your original
  text, you have to do an exact word count by hand!
  (Very time-consuming)
• Some translators wont work by the source
  wordyou are passing risk on to them

18
Target-Word Accounting

• Advantages
• The final word count will always be for an
  electronic documenteasy to check
• If you have a paper source document, you can use
  time-saving shortcuts to get the word count.

• Disadvantages
• If expansion rate is greater than you
  calculated, your profit will shrink.
• Translators who send their invoices late will
  delay your closure of the job.

19
Drafting the Quotation

• When a client sends you a document and asks you
  what it will cost, you should respond with a
  quotation (also called a quote, bid, or offer).
  The quotation serves several purposes
• It tells the client how much his/her project
  will cost, and how long it will take to do.
• It establishes the scope of the project which
  services you will and will not perform.
• It lays down the expectations the agency has of
  the client and vice versa (e.g., A client
  representative should be available to answer
  questions about company-specific terminology.)
• If you have the client sign off on the quote,
  you have written authorization to start work and
  acceptance of your terms.

20
Drafting the Quotation (2)

• The quotation should
• be detailed to prevent misunder-standings later,
  but easy for the client to read through and
  understand.
• look niceit is the first written impression the
  client will have of you.
• be absolutely letter-perfectno grammar errors
  or typos!!

21
Drafting the Quotation (3)

• Parts of a quotation
• Your company logo/contact information
• Client information
• Complete job description/scope
• Expectations/assumptions
• Timing information
• Cost information
• Place for client to sign off (accept quote)
• Place for client to fill in payment information

22
Drafting the Quotation (4)

• Your company logo/contact information
• Remember, this is a marketing pieceit is
  important to make an attractive, stylish document
  that will catch the eye of your reader and convey
  a professional image. Include all contact
  information including e-mail address, Web site,
  fax number, etc. and your name as the company
  contact.

23
Drafting the Quotation (5)

• Client information
• You should have everything about the client in
  this area name and department of your contact
  and complete address information, including the
  e-mail address. You want to be sure you can get
  back in touch with him/her.

24
Drafting the Quotation (6)

• Complete job description/scope
• Be sure to specify language combination(s),
  title, type and length of document (in pages),
  services you will be rendering, how you will
  return translation project to client, what
  software and version the completed project will
  be in, and any special instructions.

25
Drafting the Quotation (7)

• Expectations and assumptions
• This is where you specify any limitations,
  assumptions, or cautions for example, you could
  say that you will make every effort to complete
  the work by the date indicated, but reserve the
  right to adjust the schedule if production loads
  or other problems make it necessary. Or you can
  limit the validity of the quotation to 90 days.
• You can also use this space to mention that you
  only use translators who are translating into
  their native language, have x years of
  experience, ATA accreditation, etc.

26
Drafting the Quotation (8)

• Timing information
• This is where you tell the client how long you
  think it will take for you to finish the job.
  Give a range to give yourself a little breathing
  room (e.g., 3-5 business days). If the client has
  a hard deadline, note no later than time,
  date as specified by client.

27
Drafting the Quotation (9)

• Cost information
• This is what the client has been waiting for the
  cost. You can break the cost down into sections
  (translation/editing, desktop publishing, project
  management, materials, etc.,) or just put the
  total cost by itself.

28
Drafting the Quotation (10)

• Place for client to sign off (accept quote)
• Place a small disclaimer of some kind (I hereby
  accept the terms, scheduling, and prices detailed
  in this quotation) at the bottom and leave space
  for the clients signature and the date of
  approval (sometimes quotations sit around for
  days or weeks before they are approved).

29
Drafting the Quotation (11)

• Place for client to fill in payment information
• There are three things you need in this section
• Complete credit card information and signature,
  if your agency accepts credit cards
• Purchase order information if the client is
  using a purchase order
• Billing address, if different from the contact
  address